Nick Newsom’s interest in communications started when his dad gave him a ham radio as a kid.
That interest almost got him kicked out of high school.
The founder and chief executive of Foothill Ranch-based cloud-based telecom software company Ytel Inc. said school officials thought he was trying to hack into the computer system.
“I wasn’t doing anything bad,” Newsom said. “I was [just] poking around the system a little bit.”
“Poking around a little” in a school system might result in a student getting a visit from the feds these days. In the ’90s, it resulted in a business opportunity.
“My father and I went back in there and said, ‘Hey, instead of making this adversarial, why don’t I work with you guys?’ I went from being kicked out for the day to now I’m on staff. It was great.”
The $4 per hour job helped Newsom get his foot in the door to be trained by Microsoft Corp. and set him on a path to launching Ytel in 2012.
Ytel—which describes its roots as “old school telecommunications”—provides software to companies that helps them connect directly with customers through voice, text, email and direct mail.
It’s raised more than $10 million in a Series A round with investment from private-equity firms The Argentum Group in New York and Marwit Capital in Newport Beach.
The company has grown to 120 employees; it moved into its 30,903-square-foot space in April—nearly four times larger than its former Foothill Ranch location.
Its new digs feature amenities such as an arcade, electric bikes and free lunch; the company’s been ranked among Orange County’s best places to work in a variety of publications. Newsom, father of two, espouses a good work-life balance for employees.
The Business Journal honored him with an Innovator of the Year Award, one of five awardees at the Sept. 20 event held at Hotel Irvine (see other winner profiles, pages 1, 6 and 8).
“I was a little shocked to be honest,” he said, recalling the ceremony. “It really was an honor to be on stage with so many other great innovators.”
Juggling Act
Newsom grew up in Los Angeles but moved to Idaho as a teenager in the early ’90s, when he landed the gig working for his high school as a junior.
It was during that time the school received a $1 million technology grant from the state.
“We didn’t have a lot of tech people [at the school] so basically this huge budget landed in my lap,” Newsom said.
So he got to work with school officials helping to network all of the schools in his district “with this amazing new thing called fiber optics,” updating email servers and introducing teleconferencing.
Newsom had also started his own side business, Multipurpose Computing, helping local companies with telecommunications. He managed to pick up a government contract with the state—earning him $60 per hour.
It was his work with the school district that piqued Microsoft’s interest. The software giant heard about his efforts and offered to train Newsom in California to become an engineer if he could finish high school a year early.
While most kids were out attending football games, Newsom spent his final year of high school working and studying.
“I did my entire junior and senior year at once—not a GED,” he said. “I took double the classes. I took classes at night, anything I could to get my senior year done in my junior year. My dad was always concerned with my sleeping because I was only sleeping about four hours a night.”
But the move paid off. After his stint with Microsoft, he relocated to Orange County, working as a network administrator for IT services firm Perot Systems, which Dell acquired in 2009, then sold in 2016 to Japanese firm NTT Data for $3.1 billion.
Newsom has been in the communications industry for more than 25 years—holding roles as chief technology officer at Genisys Financial Solutions and president of F9 Group Inc.
He ultimately decided to turn his expertise at helping businesses better market and engage with consumers into his own company.
In the Cloud
Ytel got its start offering businesses cloud-based communication software to call centers, marketers and other area companies.
At the time he founded it, Newsom said many companies would purchase call center software or phone systems that would then be installed in a closet.
“We said, let’s just get rid of all that [equipment] and put everything in a web browser,” he said. “We never wanted our customers to download or install a piece of software. We wanted everything to be very simple, so that’s how Ytel was born.”
In 2016, it introduced a communication application programming interface, or API, so firms could integrate multiple forms of communication, such as sending a mass text message to thousands of customers at one time through Ytel’s system.
Newsom said the company is working on several initiatives, including rolling out products next year tailored for nonprofits.
“We give back, but I don’t necessarily feel like we’re making a big enough impact,” he said. “We really want to have our products be a part of the greater good.”
